Please Explain

Why freight fails

The last week in November and the first 2 weeks in December are a terrible time for us every year - we cop a lot of customer complaints over slow freight timeframes and the same pattern emerges time and again. You would think our skins get thicker but it's simply not the case.

Despite our lightning fast order processing speed, this year has been an utter nightmare with freight services across Australia. We have never, ever, seen such poor performance - mostly from AusPost.

We escalated our frustrations directly with the CEO of AusPost and in response Executives have been working through a range of issues within their parcel network and sharing findings.

The problems are not confined to AusPost but all residential freight providers and I'm completely surprised the news did not reach the media as frustrations were running high - every day we had many customers complaining and it rendered us powerless to help. I found myself driving around the streets of Melbourne delivering free coffee to some of our customers where it was possible.

Freight networks are a series of large pipes that everybody uses - it's the same network and no merchant has special access, faster methods or ways to make problems disappear.  

First and foremost, the issues have nothing to do with what we can manage at our end. Our parcels are packed into brand new cartons (although you wouldn't believe it after beaten up in transit), using computer generated consignment labels and we have exemplary freight processes right up to moment we delicately pass by hand each one of our hundreds of parcels into the collection vehicle for scanning each day.

The care and attention we put into each parcel is a benchmark for parcel handling and it's the best available solution we can imagine - leaving absolutely nothing to chance.

Now, back to what occurred..........a few months ago, AusPost invested millions into new technology to automate the processing of Express parcels in Melbourne and Sydney. This major initiative was aimed at improving capacity and performance of Express parcels (which we have often complained as being sub-standard) as the practise of sorting Express parcels (streaming) had up until then been manual.

Unfortunately, the new systems experienced major operational reliability issues and at times the systems needed to be shutdown or bypassed due to technical difficulties.

As you can probably imagine, with peak freight season from October, the big sales spikes from Black Friday and Cyber Monday exposed major problems and congestion that built up to severe choke points in the national parcel network. Apparently, reverting to manual processing for Express parcels was not easy or simple, so it created overflow challenges that also affected non-express parcels.

We were seeing "black outs" across both Express and Regular parcels for up to a week and can only speculate that AusPost were in complete meltdown and to add insult to injury, they operated in a "cone of silence" which left us somewhat dazed and confused unable to explain to those customers needing help. It's only now the real story is known and shared by AusPost confessing just before Xmas.

Sendle performed relatively well during this period, but as we approached Xmas, random Sendle parcels were being stuck in remote freight depots for days and days not moving - which is again frustrating for everyone.

Sendle's performance to capital city metro areas (excluding WA) has been good, however, the remote areas are incredibly slow and we believe this has more to do with hand-off to 3rd party agents not processing parcels with any sense of urgency or waiting days until they had enough parcels to justify the delivery drop-offs.

Sendle are constantly optimizing their matrix in real time, so they are acutely aware of problem areas and tweak their partner network allocations accordingly. This is intelligently using better performing partners much in the same way Uber allocates drivers.

AusPost have assured us the problems with their parcel networks are resolved and performance will improve dramatically. I'm not holding my breathe on that promise but I can share there has been a recent acknowledgement from AusPost that their performance in the last month was disappointing and unlikely to ever be repeated.

You would hope that AusPost learns a valuable lesson from the last month - don't implement broad changes entering a peak period without a contingency plan!

Apparently, the volumes of parcels this year processed by freight companies caught them all by surprise and it seems that when certain thresholds are exceeded, things go horribly pear-shaped. When you think it might be a day longer it turns out to be 3 or 4 days which for us and our customers we struggle to accept or rationalise.

Every delivery driver that turned up at our warehouse in December was gobsmacked at the overfull situation at their depots and the frantic pace they were working. Many commented they had never seen it like this before and everyone was caught off-guard.

With online shopping growing fast, it begs the question how merchants expect to keep their customers happy with an entire logistics industry operating without a duty of care or responsibility.

We raised this point last month, freight agreements need performance penalties because quite frankly that's what injures a merchant when a customer is let down, but freight companies hide behind legal protection - it's certainly not fair or reasonable.

As a business that prides itself on speed and efficiency, freight delays are incredibly uncomfortable and frustrating problem to deal with - it's a daily exercise that consumes incredible resources inside our company - supporting customers and trying to do the right thing against a tsunami of freight mediocrity.

We get it.....speed is everything and when you place orders there are expectations around ETA's.

Unfortunately, we can't influence or control the behaviour of freight companies, but we can keep applying pressure to force change........and of course we continue to explore new alternatives to combat choke points and offer our customers more choices.